This opinion piece appeared in The Hill.
Frank Clemente & Margarida Jorge wrote:
As President Trump and Republicans in Congress push for a second round of tax cuts, it’s important to look at how the first Trump-GOP tax law adopted last December hurt working families. One of the worst ways has nothing to do with taxes.
It does this in two ways. First, by driving up deficits by about $2 trillionover 10 years, the law puts Medicare, Medicaid and the Affordable Care Act (ACA) in the line of fire. Trump and Congressional Republicans are already using the massive deficits their tax cuts created as an excuse to cut between $1 and $2 trillion from these health care programs.
Second, the law weakened a requirement under the ACA that everyone who could afford it obtain health insurance. Just like with auto insurance, to spread the insurance risk and keep premiums more affordable, everyone must be insured. Experts predict that weakening this requirement will cause 8 million fewer Americans to be insured. Moreover, rates on insurance purchased through ACA health plans are projected to jump by 10 percent a year for the foreseeable future, per the Congressional Budget Office, or about $2,000 more for a family.
Many families are already feeling the impact. In the 17 states in which insurance companies have so far filed rate plans with regulators, the statewide average proposed premium increase for benchmark plans is up 11 percent. While prices dropped or stayed level in five states, planned premiums in the other twelve states and the District of Columbia all surged upwards, as much as 36 percent in Maryland.
That means a 40-year-old nonsmoker in Baltimore now paying $456 for coverage would see that monthly premium soar to $622 in 2019—or nearly $800 more for the year. Nationwide, older Americans would suffer the steepest price hikes, absorbing an “age tax” of $1,500 a year for an average 64-year-old, AARP estimates.
A survey last March by the Urban Institute found that many insurers were thinking of quitting ACA health plans because of the shrinking risk pool, market uncertainty and higher costs caused by constant attacks on the law. In a letter to policyholders announcing premium hikes, a New York State insurer, like many others, cited the weakening of the requirement to obtain health insurance as a cause of the higher prices.
Weakening the ACA through the new tax law saves the government more than $300 billion over 10 years because many fewer people will be signing up for insurance, many of whom would have qualified for Medicaid or received public subsidies to help pay for private coverage. But rather than invest that money in health care or other essential public services, Trump immediately spent it on tax cuts that benefit drug companies, health insurers and other wealthy corporations.
The same Trump-GOP tax law gave the 10 biggest drug companies a tax cut windfall of $76 billion on their $500 billion in untaxed offshore profits, most sitting in tax havens. The tax law cut their bill by more than half, draining money from the federal budget so corporations can get richer while millions lose their health care.
Pfizer alone was rewarded with a $26 billion tax cut. Yet, over the last 18 months it has jacked up prices on many of its top-selling drugs three times. The prices for some of its more important medicines — Lipitor, Neurontin, Chantix and Zoloft — are up an incredible 30 percent. Price gouging and tax dodging is the drug industry’s business model.
Weakening the health insurance requirement is not the only way Trump and the GOP are undermining the ACA. Through legal challenges, executive actions, and fresh legislative gambits, the GOP is trying to dismantle a program that’s brought health and hope to tens of millions of desperate families, while improving insurance coverage for many others.
And health care is far from the only vital public service the Trump tax law threatens by running up deficits that the GOP then tries to tame by slashing services. Social Security, education, housing assistance, food aid and more all face punishing cuts due to huge tax-cut giveaways to the wealthy and well-connected.
Remarkably, Republicans are talking about a second round of skewed-to-the-rich tax cuts that would further endanger funding for health care and other public services working families depend on. Rather than double down on a bad idea, Congress should repeal Trump’s tax cuts for the wealthy and corporations and end his attacks on American health care.